Industries face staff challenge with new immigration rules

The think tank’s research found that restrictions could inhibit recruitment in critical sectors of the economy and exacerbate the risks of informal working and exploitation by unscrupulous employers.

Business groups have joined IPPR in calling for more flexibility in the new immigration system and for employers who invest in local skills to be rewarded.

Analysis reveals that under the new system almost two-thirds, 63 per cent, of EU-born workers currently living in the UK would not have been eligible for a skilled worker visa.

This rises to 78 per cent for EU-born employees in the social care sector.

Marley Morris, IPPR associate director for Immigration, Trade and EU Relations, said: “We are now weeks away from one of the greatest changes to our immigration system in decades.

“Our research finds that sectors such as social care and construction could face increasing skills shortages as a result of the coming changes.

“As our care system struggles and businesses reel from the effects of the pandemic, it is vital that the new points-based system helps to support the country’s response to coronavirus and the economic recovery.”

In addition to revealing the system’s shortfalls, the report also highlights the ways the new points-based immigration system could be reformed to tackle the UK’s deep economic challenges.

Some of the report’s key reform proposals have been backed by a number of major employer and professional associations in a joint statement.

Organisations such as Care England, the Federation of Master Builders, the North West Business Leadership team, London First, the Recruitment and Employment Confederation, UK Homecare Association, and allianceHR have signed a statement.

The statement reads: “Many sectors like construction, food and drink manufacturing, social care and hospitality will struggle to recruit from abroad under the new system.

“And while businesses will be prioritising the recruitment of unemployed UK workers, it will inevitably take time to retrain workers to address skills shortages.

“We therefore need action now in the interim to support our economy to get back to full strength.”

The IPPR’s recommendations include extending the shortage occupation list to allow for the inclusion of jobs at all skill levels.

It calls on the Government to follow the Migration Advisory Committee’s advice to immediately add new occupations to the shortage occupation list in time for the introduction of the new system, in order to address existing skills shortages in sectors critical to the pandemic response.

IPPR recommends a reduction in the salary threshold of £25,600 to the living wage – a £19,344 annual salary for a 40-hour week.

The report also calls for employers to be exempted from the immigration skills charge if they can demonstrate to the Home Office that they are investing in skills and training.

Mr Morris said: “The Government can use the new system to ‘build back better’ from the current crisis.”

He added: “The rules should be reformed to allow employers to address immediate skills shortages across all parts of the labour market, while also encouraging employers who sponsor migrant workers to pay the living wage, offer secure work, and invest in skills and training.”

Researchers at IPPR found that industries highly reliant on EU migration would be hit particularly hard by the new system, such as in food production where EU workers make up one in every four workers.

The think tank warns that the economic recovery from the pandemic could be jeopardised by the new immigration system.

In some areas where economic prospects are returning – such as manufacturing, logistics, and construction – employers may struggle to recruit the skills they need due to the new restrictions.

Reduction in numbers likely

The IPPR paper ‘Building a post-Brexit immigration system for the economic recovery’ was published today.

The report recognises that the end of free movement and the new points-based immigration system will likely cause a reduction in European migration.

However, it concludes that this will not in any way benefit UK workers in the long run. Migration does not only increase the supply of workers, but it can also increase demand for workers, typically resulting in no significant impact on wages or employment.